A home health care provider and related entities have agreed to pay more than $9 million to settle allegations that they defrauded Medicare by concealing the home health agencies’ relationship with their management company.  The settlement also requires compliance with an ongoing Corporate Integrity Agreement.  

The government alleged that the defendants submitted false cost reports that concealed a financial relationship between the home health care provider and its management company.  Had the cost reports disclosed that the management company was a related entity, that would have lowered the Medicare reimbursement for the management company’s services.

Among the factors cited as evidence of the relationship, the government alleged that principals of the management company:
  • exerted significant control over the home health agencies;
  • facilitated the purchase of the home health care agencies;
  • made loans worth millions of dollars from companies they owned to the home health agencies;
  • made cash transfers for millions of dollars from the management company to the home health agencies; and
  • had day to day control over the home health agencies’ operations.

The government also alleged that the purported owner of the home health care agencies was merely a figurehead.

This is just the latest example of the government looking into substance over form.  Even if you think that you have documented all the relationships properly to establish separate legal entities, the government will dig deep into your records to determine whether entities that do business together are related or truly independent.

John Howley

New York, New York

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.  I invite you to contact our law offices and welcome your calls, letters and electronic mail.  Contacting us does not create an attorney-client relationship.  Please do not send any confidential information to us until such time as an attorney-client relationship has been established.  I practice law and offer legal services only in jurisdictions where I am properly authorized to do so.  I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.

09/19/2012 21:05

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